ASTSW - What's Up With AST SpaceMobile And Its 1-Day 28% Jump?

• If you're not familiar, AST SpaceMobile aspires to bring satellite connectivity to your ordinary cell phone using phased array antennas in orbit.
• The technology is real, as it's based on simple physics. What isn't simple is the execution, which is admittedly a huge gamble.
• Since the start of the month, the stock has climbed from $6.91 to nearly $12 as I write this.
• What's causing the climb, and what should you expect next?

The above stock photo has nothing to do with AST SpaceMobile, Inc. ( ASTS ). Well, almost nothing.

What you see above is an array of several radio antennas observing together. This, in effect, creates a single telescope which is miles wide. Unlike what you see above, AST SpaceMobile is not doing this on earth. They are doing this in space, several hundred miles up.

Down here on earth, these satellites will have 2-way communication with your cell phone. Yes, any ordinary cell phone, such as your existing iPhone or Galaxy. The satellites above will be 447 miles away, at their closest!

Now I know you are thinking that sounds like nonsense. You're not alone, as many investors/speculators feel the same. That's why the stock has a 24% short interest.

Well one can legitimately question the feasibility of creating such a satellite constellation, one cannot really question the physics which proves this is at least possible .

Right now, we have a satellite which is 14,000,000,000 miles away from earth. Yes, that means its outside our solar system, in interstellar space. Voyager 1 was launched some 44 years ago. Despite having just a 3.7-meter (12 ft) antenna, it communicates with us here on earth.

That's possible by using a phased array antenna here on earth. You see, you don't need big antennas on both ends - just one end - to make such long-distance communication possible.

On the same day of the de-SPACing, I published the first in-depth analysis of AST SpaceMobile here on Seeking Alpha. If you haven't already, I encourage you to read it to understand the technology better. The article is appropriately titled AST SpaceMobile: 20-100x Return Or 100% Loss, It's A Binary Bet.

What's moving the stock lately?

Well, I am not on Reddit. About 5 months after my first article, I pointed out how ASTS hit number one on WallStreetBets . Yes, it had joined the leagues of GameStop ( GME ), AMC ( AMC ), and Bed, Bath & Beyond ( BBBY ) in becoming a meme stock.

To see if that was responsible for today's surge, I did search ASTS on WSB and didn't see anything on their daily discussion thread today, August 11th.

Well certainly the "apes" still play a part, the main catalyst for the stock lately is that the BlueWalker 3 test satellite has finished testing and has successfully been transported to Cape Canaveral. It will be hitching a ride on a SpaceX ( SPACE ) next month. Initially slated for around September 15th, if you read between the lines on the regulatory filings, you will see that it may be as soon as September 9th. Note that launch windows are just that, a window, as they are dependent on weather cooperating.

What should you expect next?

Unless the rocket blows up or the satellite is downright dead on deployment, the risk for shorts in the coming weeks is great. I say this because if it is successfully launched, press releases might propel the stock further or at least keep it elevated.

For shorts banking on a failure of the technology, not that the company has already stated they expect testing to take weeks. That means that, even if for some reason the satellite was faulty - either mechanically or in its design - we probably wouldn't find out for several weeks until after it has been deployed into orbit.

That takes us to October, maybe November. Meanwhile, you have nearly a quarter of the shares short. That's a long time to wait for potentially bad news.

Note that my rating on this stock is based on a long-term outlook of 5+ years. Even if everything goes as planned with BlueWalker 3, don't be surprised if ASTS hits the $6s (as it was at just a couple weeks ago) or even lower, if market sentiment is weak. ASTS is a highly speculative company. Yet for that very reason it might be one of the most asymmetric risk/rewards on the market.

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